JLL Sues McDonald’s Landlord Over Lease Commission

JLL is heading to court to claim that McDonald’s Fulton Market landlord forgot to include the bread.

An affiliate of Normandy Properties refused to pay a commission of more than $493,000 to Chicago-based JLL after it helped arrange a lease expansion last year for the fast food giant at 110 North Carpenter Street, according to a lawsuit filed last week in Cook County court.

JLL filed the lawsuit after McDonald’s in September added about 16,000 square feet to its lease in the building, almost all of which was already occupied by the company. The terms of the deal last through 2033.

McDonald’s moved its headquarters to the Fulton Market building from its former suburban Oak Brook campus in 2018, a significant addition to the momentum of the neighborhood’s recent explosion.

The property is a 575,000-square-foot office building that was sold in 2020 to Normandy from developer Sterling Bay for a neighborhood record $412 million. Pittsburgh-based Normandy is backed by members of the Snyder family that inherited the wealth of late-1800s steel-industry baron William Penn Snyder Sr.

The landlord has told JLL it is not shelling out the commission because the deal didn’t trigger its requirement to pay under its contract with the brokerage, the lawsuit states.

Normandy and JLL have not responded to requests for comment.

JLL claims it’s owed a 6 percent commission on new leases or expansions by existing tenants in the building, and that a JLL team that represented McDonald’s in negotiations is entitled to split the commission, as well.

The lease of the additional space requires McDonald’s to pay a total of $8.7 million more than it was previously paying to the Normandy affiliate over the life of the deal, including a base rent of $43 per square foot, with annual increases up to more than $53 in its fifth year through the rest of the lease. JLL claims it is owed its commission rate on the total rent of the lease, which includes the expansion.

Around the time the lease expansion was completed, McDondald’s announced it was bringing its Speedee Labs operation into its headquarters building with an addition of about 15,000 square feet, and moving all jobs from a previous Speedee Labs facility in Romeoville to the building.

The facility will provide the company a workspace to experiment and train employees on the McDonald’s Speedee Service System — an operations method that was introduced in 1948 and reengineered how restaurants operate by streamlining crew responsibilities. It’s set to open within the building in the second half of this year.